8 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados’ Economic Performance 2026 Barbados maintained stable economic growth and low inflation throughout 2025, despite heightened global economic uncertainty and trade tensions. According to the Central Bank of Barbados, the economy demonstrated resilience, supported by strong performance across key productive sectors and sound macroeconomic management. Real Gross Domestic Product (GDP) expanded by 2.7 percent during 2025, with growth driven primarily by tourism, business and other services, construction, and agriculture. Inflationary pressures remained subdued, with the 12-month moving average inflation rate slowing to 0.7 percent by November 2025, reflecting lower international oil and freight costs. However, point-to-point inflation rose to 1.7 percent, influenced by higher housing, utility, and dining costs. Labor market conditions remained stable, with the unemployment rate at 6.6 percent at the end of the third quarter of 2025, although jobless claims experienced a modest increase during the year. Barbados’ external position remained strong. International reserves stood at approximately $3.0 billion at the end of December 2025, supported by robust tourism receipts and capital inflows related to tourism investment projects. Fiscal performance reflected continued discipline. The Government recorded a primary surplus of $541.7 million, equivalent to 3.3 percent of GDP, alongside a near-balanced fiscal position. These outcomes, combined with economic growth and GDP rebasing effects, contributed to a reduction in the debt-to-GDP ratio to 94.6 percent at the end of 2025. Financial Sector Developments The financial system remained sound and stable throughout 2025, characterized by: • Continued credit growth, particularly to the non-financial private sector, which expanded by 5.2 percent, • Improved credit quality • Elevated but gradually moderating liquidity levels, and • Sustained profitability and strong capitalisation across institutions. These conditions supported ongoing financial intermediation and reinforced confidence in the financial system. Barbados’ Economic Forecast The Central Bank projects that Barbados will maintain its growth momentum, supported by continued expansion in tourism, construction, and business services. However, risks remain stemming from: • Global trade tensions, • External economic shocks, and • Persistent structural vulnerabilities associated with a small, open, tourism-dependent economy. Continued focus on economic diversification, fiscal discipline, and investment in resilience will be critical to sustaining long-term growth Management Discussion & Analysis (MD&A) This section of the Annual Report provides a discussion and analysis of the financial position and performance of the Barbados Public Workers’ Co-operative Credit Union Limited (BPWCCUL) for the financial year ended March 31, 2026, as compared to the financial year ended March 31, 2025. The Management Discussion and Analysis (MD&A) should be read in conjunction with the audited financial statements, which have been prepared in accordance with IFRS Accounting Standards (IFRS).
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